#731 Weekly BTC On-Chain Update w/ Will Clemente
11/27/2021 · 10 min · transcript via mlx
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Key topics
— On-chain cost basis as a bull market support band currently sitting at $53K, aligning with technical support and the $1 trillion market cap threshold.
— Entity-adjusted SOPR metric bounced off the one threshold, indicating a healthy retest of profit/loss equilibrium in a bullish trend.
— Supply shock ratios showing strong bullish divergences between the oscillator and price over recent weeks, historically resolving upward.
— Short-term derivative metrics (open interest, funding, liquidations) have not yet flushed significantly, which could precede further downside wicks.
— Broader macro cyclical on-chain behavior remains unchanged despite recent price drawdown, with no multi-year bear market signal evident in the data.
Market & price signals
— Bitcoin's on-chain cost basis sits at $53K, serving as both a technical support level and the $1 trillion market cap threshold. SOPR bounced off the one level (profit/loss equilibrium), a healthy sign in bull trends. The supply shock ratio—comparing liquid to illiquid entities—shows a strong bullish divergence: the oscillator has been rising while price has fallen, a pattern that has historically resolved in the direction of the oscillator. Open interest and funding rates have not experienced significant liquidation flushes, which sometimes precede bottoms. No invalidation of the bull case has occurred; key levels would be a close below $53K, SOPR breaking below one, and liquid supply rolling over.
Actionable insights
— As long as Bitcoin closes above $53K and core invalidation points (SOPR staying above 1.0, liquid supply not rolling over) remain intact, the asymmetry favors upside over the next couple of months.
— Short-term volatility and liquidation-driven wicks down remain possible and should not be mistaken for the end of a bull trend; distinguish between tactical drawdowns and macro cycle shifts.
— Monitor the supply shock ratio bullish divergence as a leading indicator; historically, divergences have resolved in the direction of the oscillator within weeks to months, suggesting higher Bitcoin prices ahead if the pattern holds.
— Bitcoin's on-chain cost basis sits at $53K, serving as both a technical support level and the $1 trillion market cap threshold. SOPR bounced off the one level (profit/loss equilibrium), a healthy sign in bull trends. The supply shock ratio—comparing liquid to illiquid entities—shows a strong bullish divergence: the oscillator has been rising while price has fallen, a pattern that has historically resolved in the direction of the oscillator. Open interest and funding rates have not experienced significant liquidation flushes, which sometimes precede bottoms. No invalidation of the bull case has occurred; key levels would be a close below $53K, SOPR staying above 1.0, and liquid supply rolling over.
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